November 16th 2017

Australian Securities Exchange Limited Via Electronic Lodgement

57 139 522 900

DALGARANGA GOLD PROJECT - MINE PLAN INCREASED TO OVER 650,000 Oz
  • The Dalgaranga Mine Plan has been updated to include three deposits, Gilbeys (including Gilbeys South), Golden Wings and the more recently discovered Sly Fox deposit.
  • The Mine Plan now incorporates 652,000 oz of contained gold (16.2 Mt @ 1.3 g/t gold), following successful exploration close to the mill.
  • Gascoyne has fast tracked development activities for the upper portions of the Sly Fox discovery to maximise plant throughput, following recognition that the 2.5mtpa plant under construction has capacity to treat up to 3.0Mtpa of oxide ore.
  • The new mine plan includes an increase of ~ 1million tonnes over previous mine plan, which allows the Company to utilise the excess plant capacity for the first 2 years of production, defer waste movement, and extends gold production beyond 6 years
  • The Mining Inventory comprises :
    • Total Ore Reserve of 15.3 Mt @ 1.3 g/t gold for 612,000 oz (94%) - previously 582,000 oz, and
    • A minor component of Inferred Mineral Resources within the pit designs of 0.9 Mt @ 1.4 g/t gold for 40,000 oz (6%)
  • Gilbeys Ore Reserve has been updated to account for the updated Mine Design. The Gilbeys Ore Reserve now stands at 523,000 oz (13.2 Mt @ 1.2 g/t gold) and is made up of:
    • Proved Ore Reserve of 2.8 Mt @ 1.4 g/t gold and
    • Probable Ore Reserve of 10.4 Mt @ 1.2 g/t gold
  • Golden Wings Ore Reserve has also been updated to account for the updated Mine Design and Mineral Resource. The Golden Wings Probable Ore Reserve now stands at 63,000 oz (1.4 Mt @ 1.4 g/t gold)
  • Sly Fox maiden Probable Ore Reserve has been estimated and stands at 26,000 oz (0.6 Mt @ 1.3 g/t gold). The deposit remains open in all directions.
  • Construction of the Dalgaranga Gold Project is on schedule and on budget, with first gold production scheduled to be in the second quarter of 2018.

    P.O. Box 1449, West Perth, Western Australia 6872 Level 1, 41-47 Colin Street, West Perth, Western Australia 6005 Telephone +61 8 9481 3434, Facsimile +61 8 9481 0411

    Email: admin@gascoyneresources.com.au, Web: www.gascoyneresources.com.au

    Gascoyne Resources Limited ("Gascoyne" or "Company")(ASX:GCY) is pleased to announce that its 100% owned Dalgaranga Gold Project's (the Project) mine plan and Ore Reserves have been updated. The Project contains a Measured, Indicated and Inferred Resource of 31.1Mt @ 1.3 g/t for 1,320,000 ounces of contained gold (see Table 4 below). The updated mining inventory comprises 16.2Mt @ 1.3g/t gold for 652,000 oz of gold which is inclusive of Proved and Probable Ore Reserves of 15.3Mt @ 1.3 g/t for 612,000 ounces of gold (see Table 2).

    The updated mine plan incorporates a nameplate 2.5Mtpa processing plant, currently under construction (see below) and three open pits which will feed the processing plant for more than 6 years, with life of mine (LOM) annual production averaging approximately 100,000ozpa.

    Updated Ore Reserves:

    The Dalgaranga Ore Reserve has been updated to incorporate a number of changes since the June 2017 Ore Reserve was released. These changes include a redesign of the Gilbeys pit, an update of the Golden Wings Mineral Resource, minor adjustments to the Golden Wings pit and inclusion of the upper portions of the recently discovered Sly Fox deposit.

    The revised Dalgaranga Mining Inventory now stands at 652,000oz, including increased Ore Reserves; now 612,000oz (15.3Mt @ 1.3 g/t, see Table 1 & 2). In addition to the Ore Reserve, 40,000oz (0.9Mt @ 1.4 g/t gold) of Inferred Mineral Resource are contained within the new mine designs. The Inferred Mineral Resource accounts for only approximately 6% of the mill feed.

    See Appendix A for details of the modifying factors used for the Ore Reserve determination, Appendix B for details of the site layout, open pit and waste dump designs and Appendix C to E for the JORC 2012 Table 1 for Gilbeys, Golden Wings and Sly Fox.

    Updated Mining and Processing Plan:

    As a result of the discovery of the Sly Fox deposit and revised open pit designs for Golden Wings and Gilbeys, the Dalgaranga mine plan has been updated.

    The inclusion of Sly Fox into Years 1 & 2, as well as implementation of a staged mining approach at Gilbeys has allowed utilisation of the processing plant above its nameplate capacity due to the increase in oxide ore. This results in gold production of up to 120,000ozpa for the first two years, while also defering around 10 Mt to 12 Mt of waste movement from these years of the operation (see Graphs 1 & 2 and Table 3). These changes further improve the early cashflow from the Project. Defering this waste movement delays approximately $20 million dollars of costs out of the first two years of the operation, with annual production effectively unchanged and enhancing the ability for early debt repayment.

    The key aspects of the revised mine plan are:

  • The upper portions of Sly Fox mined in the first 17 months of the operation.

  • Golden Wings Pit mined in the first 23 months of the operation.

  • The staged cutback of the existing Gilbeys pit commences after 3 months of mining.

  • The staging of the Gilbeys cutback, significantly reduces the strip ratio and mining costs for the first few years of the operation. Approximately 10 Mt to 12 Mt of waste is deferred out of Year 1 & 2.

  • Ore Processing commences 3 months after mining commences at a rate of 3.0Mtpa while treating oxide ore.

  • After the oxide ore is exhausted at the end of Year 2, the processing rate decreases to the process plant's nameplate capacity of 2.5Mtpa

  • In Year 4, when treating the harder "lower fresh" ore, the grind size is increased to 125µm (from 90µm) to eliminate the need for installation of a second grinding mill saving approximately $10 million in sustaining capital.

  • It has been assumed that the Inferred Resource (6% of the total mill feed) within the pit designs is mined and stockpiled and only milled progressively (when required) at a rate of approximately 20,000 tonnes per month commencing after 6 months of processing.

Table 1 - Mineral Resource Breakdown within the Dalgaranga Pit Designs

Total Material [Mt]

Waste [Mt]

Strip Ratio [w:o]

Measured & Indicated

Inferred

Insitu Ounces (koz)

Tonnes [Mt]

Au [g/t]

Tonnes [Mt]

Au [g/t]

Measured

& Indicated

Inferred

Gilbeys

118.2

104.5

7.6

13.0

1.23

0.7

1.3

515

31

Gilbeys South

3.0

2.8

10.9

0.23

1.12

0.03

3.6

8

3

Golden Wings

16.4

14.9

9.7

1.4

1.39

0.1

1.5

63

6

Sly Fox Pit

5.9

5.3

8.2

0.63

1.26

0.01

1.4

26

0.5

Total

143.5

127.4

7.9

15.3

1.25

0.9

1.4

612

40

Totals may not add due to rounding.

Table 2 - Dalgaranga Gold Project Ore Reserve - As of November 2017

Pit Area

Classification

Ore Reserve

Tonnes (Mt)

Au Grade (g/t)

Gilbeys(1)

Proved

2.8

1.36

Probable

10.4

1.20

Sub Total

13.2

1.23

Golden Wings

Proved

-

-

Probable

1.4

1.39

Sub Total

1.4

1.39

Sly Fox

Proved

-

-

Probable

0.6

1.26

Sub Total

0.6

1.26

Total Dalgaranga Ore Reserve

15.3

1.25

Notes: 1. Includes Gilbeys South Pit.

All Ore Reserves are completely included within the quoted Mineral Resources and are quoted in dry tonnes. Totals may not add due to rounding.

Graph 1: Production Dalgaranga Profile Graph 2: Total Material Movement by Month

Waste Mining Deferred Out of Year 1 & 2

Table 3 - Summary Mine Production Schedule

Year Total Material Waste Mining Cost Strip Ratio Crusher Feed Stockpile

(End of Year)

Ore processed Rec.Au

Ounces

Mt

Mt

$/t

w:o

Tonnes

Mt

Au

g/t

Tonnes

Mt

Au

g/t

Tonnes

Mt

Au

g/t

Koz

Pre-prod

6.8

6.1

2.08

8.9

0.7

1.04

0.7

1.04

1

45.0

42.4

1.97

16.5

2.6

1.32

0.5

1.12

2.8

1.29

110

2

34.2

30.8

2.44

9.1

3.4

1.36

1.1

0.90

2.8

1.50

122

3

25.2

22.8

2.87

9.5

2.4

1.24

0.9

0.84

2.6

1.22

92

4

21.2

18.7

3.13

7.4

2.5

1.25

0.9

0.86

2.5

1.24

86

5

8.9

5.8

3.93

1.8

3.2

1.20

0.8

0.83

2.5

1.32

91

6

2.2

0.8

6.05

0.6

1.4

1.18

0.8

0.82

2.5

1.02

69

7

0.4

0.82

8

Total

143.5

127.4

2.60

7.9

16.2

1.3

16.2

1.3

578

Gascoyne Resources Ltd. published this content on 16 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 16 November 2017 00:29:00 UTC.

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